Why Caterpillar Is Ready to Crawl Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, heavy equipment giant Caterpillar (NYSE: CAT  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Caterpillar and see what CAPS investors are saying about the stock right now.

Caterpillar facts

Headquarters (founded)

Peoria, Ill. (1925)

Market Cap

$55.1 billion

Industry

Construction and farm machinery

Trailing-12-Month Revenue

$63.1 billion

Management

Chairman/CEO Douglas Oberhelman

CFO Bradley Halverson

Return on Equity (average, past 3 years)

33.4%

Cash/Debt

$6.0 billion / $36.2 billion

Dividend Yield

2.6%

Competitors

CNH Global

Deere

Terex

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 6,088 members who have rated Caterpillar believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, Googlespooch, succinctly summed up the bull case for our community:

Caterpillar simply is the best at what it does: making heavy earth-moving machinery. This fact has helped to keep Caterpillar the industry titan in a complex, cyclical business. Caterpillar's strong financial standing and opportunities in China all seem to point to the company as a safe bet. In addition, at this current price, they seem undervalued which helps reduce downside risk. They also have a nice dividend yield of 2.6% which should help to reduce short pressure. Even though they have had some earnings weakness lately, I believe that they can bounce back in the coming quarters and years.

Caterpillar is the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in The Motley Fool's brand-new report. Just click here to access it now.


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